Why non-experts could be the key to your corporate development strategy

Authors: Matthew Wahlrab and Craig Rochester

Large companies can become wedded to processes that have become stale over time, and employees can become attached to the status quo because it has worked in the past. Its a big, risky effort to shake things up, to change. Bigger companies tend to be risk averse, and that ensures they stay afloat, but it does not necessarily enable them to innovate and become market leaders. So how do you innovate when you are a medium-sized company, ticking along with a formula that has worked up to now?  By keeping alive the spirit of innovation that got you to where you are.

There is an important distinction between a successful company and a market-leading, hyper-successful company. Deeply embedded in this distinction is a culture of risk-taking. Often, those who are part of incumbent, successful status quo processes dont want to take big risks, or are unable to perceive new innovative opportunities precisely because they are weighed down by the detail and function of the machine that has been ticking along well enough. This is a scenario that is particularly well-suited to a fresh set of non-expert eyes.

Why development is challenging for
medium to large successful companies

  • We have too much at stake!”

When you have a lot to lose, you are less likely to risk all you have. It is a cliché (but a true one) that failures drive transformation. Stories of great personal success are draped in shadow tales of failure. For successful companies, however, failures are constantly being mitigated and minimized. And punished. Fewer errors make for smoother journeys, but they also mean you are less likely to land in an unfamiliar destination brimming with unforeseen upside potential.

  • Our software is written in COBOL …”

Established companies are often reliant on legacy code and systems. These foundations are robust and reliable. There are employees who know the system inside out, but their skills (and days with the company) are finite. It can be difficult to change or add new features to legacy systems without jeopardizing existing foundations.  For example, with monolithic software applications; if you change one feature, you may break others through dependencies. It can also be very expensive to test and risk public outcry at new features. The more rare the antique, the more specialized and resource intensive the restoration project.

  • I built the architecture you’re trying to break!”

In a successful corporate environment, it is very easy to slide into a culture that is resistant to change. People often get into leadership positions on the back of hard-earned triumphs, and their voices can dominate business strategy with the axiom, if it ain’t broke, don’t fix it.This can be the result of caring deeply about the product or service in question, and arise from a desire to maintainthe quality customers and stakeholders have come to expect. But it can also be the result of a fear of the unknown, or even laziness. Lets face it, transformation is hard work. If your position in the company is secure, and it is tied to the status quo, why change it?

  • But you haven’t gained approval yet …”

When things run smoothly, its usually because of well-oiled, tried and tested processes. Processes are wonderful, and they are at the core of how big organizations function coherently. Processes are the mantra of compliance, ensuring a company operates within regulations. Processes can also ensure employees are treated fairly through the human resources and recruitment portfolio. However, processes can also be obstructive. A process-driven company is very often not agile enough to keep up with innovative, smaller-sized competitors who push the limits of technology through empirical research and rapid innovation, not hidebound processes.  

  • The shareholders don’t like him, he’ll never push this through”

Innovative and risky ideas can be difficult to sell to shareholders. Above all, they want to ensure their slice of the pie is safe. The bigger the company, the more shareholders there are to convince that change is worth the cost/risks. Moreover, a successful company presumably has a relatively high valuation, and in that case, there is so much more individual pain tied up with the potential failure. People oftentimes become more conservative and confined in their thinking when fear informs decisions.

What roles do R&D and Corporate Development play?

R&D is risk with guaranteed reward

Strategy for internal and external growth

Corporate development is responsible for identifying and executing opportunities for growth, including inhouse restructuring, mergers, acquisitions, and investments. The aim of any ‘corp dev’ team is to improve the financial performance and efficiency of a business by creating new opportunities, sharpening competitiveness, or finding advantageous partnerships or investment opportunities.

Typically, a corp dev initiative begins with analysis and research, and the team works across the leadership hierarchy. Targets for improvement may be in management processes, human resource organization, product management, marketing, and of course financials. Benefits of a successful corp dev intervention could be improvements in customer satisfaction, leadership, investment strategy, employee turnover and ability to attract talent, and reduced costs. Corporate development is the enabler of expansion.

 

How do you generate new opportunities and drive
innovation in an established corporation?

Innovation necessitates risk. All of the methods to cook up innovation discussed here require you to absorb the cost of possible failure, and this means the first step towards innovation is overcoming fear. Once you have done that, explore these opportunities:

  • Seek new frontiers

Look for new markets to enter through partnerships – mergers, acquisitions, or licensing of new technologies.

  • Invest in new products or services

Plow resources into well-planned R&D so that you can offer new products or services to existing customers, or new ones through the diversified portfolio. 

  • Expand customer base

This be achieved through new products or services, as noted above, or through mergers and acquisitions. New customers mean a refreshed and widened scope of demands, and you have to come up with ways to meet those demands.

  • Increase marketing efforts

Launch a new campaign, or align your brand with the right affiliates. Another great way to drive innovation is to begin with a comprehensive rebrand that is founded upon an updated look at unique selling points, values, and purpose – all of these underpin the creation of new products and services.

  • Explore new business models

Do what you do well, but do it differently. Sometimes innovation arises from a realignment of growth strategies and goals for future development.

How can the ‘fresh eyes’ of a non-expert
contribute to business development?

A few years ago, I was asked to advise a multi-national mining corporation on IP management. This request came as a surprise to me at first. I cried imposter – I simply had no experience in mining and the very specific geological, logistical, and technical know-how associated with international mining operations. The mining house pushed back and argued that it was specifically because I am a non-expert in the field that they wanted me to work with them. They were on to something and this was a great lesson for me in business development strategy: Sometimes the non-expert is the secret key, able to unlock innovation and growth.

Bird’s eye view

A non-expert can sometimes detect the linkages and patterns in operations because they are not familiar with the details. When youre part of the landscape, and invested in the complexities of a given business or industry, its not always possible to see the meta-patterns and narratives whilst simultaneously observing the micro and intensively detailed view. There is an advantage to distance, and the broad strokes that are amplified through this viewpoint. Strategy is not always detail driven, and the ability to view macro patterns can unlock new insights.

Spot the obvious

Often when teams have been invested in a project or problem for a long time, they are unable to spot the obvious. Sometimes, the answers are staring you in the face and you are completely oblivious! This is something we experience in everyday life too. A fresh perspective injects new energy into a project. It has the ability to slice open an issue/challenge that may have been weighing down or obscuring the creative potential of incumbent experts working on the project

Not held back by the ‘what if’ and possible risk

A professional team that has been invested in and working on a project/goal has a lot to lose. There may be risks related to the continuation of their portfolio, or division. There may be internal rivalries or interpersonal dynamics at play. There may also be a keen awareness of how bad it will be for the business bottom line should risky new ideas and innovations not work out. A non-expert has few of these considerations and potential scenarios to manage. This frees up thinking and enables a perspective that is open to all possible futures. This is a hyper-creative and productive mindset and a huge asset to an established mid-sized or larger company.

Ready to devise the strategy your innovation needs?

Helping technical leaders win their markets, negotiate from positions of strength, and outperform their competition for investment are Rapid Alpha’s driving aims. To talk more about how we can support your team to map, leverage, and protect its IP, don’t hesitate to get in touch.

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